According to the readings, cash flow hedges are when you pay a fixed amount and receive a floating amount in return. Fair value hedges are when you pay a floating amount and receive a fixed amount in return.
Are there any good examples of these types of hedges? I suppose hedging a EIA with a call option would be a cash flow hedge. Are there any other big ones? What about fair value hedges?
Are there any good examples of these types of hedges? I suppose hedging a EIA with a call option would be a cash flow hedge. Are there any other big ones? What about fair value hedges?
Examples of fair value and cash flow hedging
